From Volume 6, Issue 52 of EIR Online, Published Dec. 25, 2007
Asia News Digest

LaRouche's Cooperation Proposal Doubly Welcome in China

Dec. 19 (EIRNS)—China's state policy is to cooperate with the United States, a Chinese economist with many connections to the Beijing banking authorities said in a discussion with EIR today.

Efforts earlier this year to try to get the U.S. to lessen its pressure on China through "unofficial" channels did not have the effect China wanted. Therefore, statements about cooperation, such as Lyndon LaRouche made in Los Angeles in November (EIR, Dec. 7, 2007), are all the more welcome, since this is what China wants to do, he said. The economist said that in a discussion with professors and students after he delivered a lecture on economics earlier this month at Beijing's Tsinghua University, LaRouche's proposals were well received.

China is well aware that while the U.S. Treasury Secretary Henry Paulson and other officials are putting on enormous pressure for China to up-value the yuan. However, it is not the allegedly "undervalued" yuan, but rather the collapsing U.S. dollar which is really creating tensions in the current financial situation.

The dollar collapse is a big problem for China, the economist said. Inflation is high, and rising fast, and one "joke" in Beijing is that while the yuan is appreciating so fast externally—against the falling dollar—internally, it is depreciating faster! The massive liquidity being generated by the huge trade surplus with the U.S., and the falling dollar, is a key source of the internal inflation.

In July, Prof. Xia Bin, now head of the financial institute at the Development Research Center of the State Council—who was one of the economist's students—made a statement that China should "be smarter in setting the issues" and use some of its foreign reserves as a "bargaining chip" in talks with foreign governments, by which he meant the United States. This was made as an "unofficial" statement in an attempt to get the U.S. to lower some of the political and economic pressure on China, but the view in Beijing is that this did not have the desired effect. Paulson and President Bush had very strong negative reactions. Therefore, the economist said, he does not think China will use this kind of "confrontation"—mild though it was—again. Offers for collaboration, as LaRouche made, are therefore all the more welcome in China.

India Forges Ahead With Moon Exploration

Dec. 18 (EIRNS)—India has installed a pair of giant antennas to monitor a planned robotic mission to the Moon in 2008. India plans to launch Chandrayaan-1 in April next year, becoming the third Asian nation, along with Japan and China, in Moon exploration. The spacecraft will conduct a lunar orbit at a distance of 385,000 kilometers from Earth.

The first robotic mission, budgeted at $100 million, will be followed by another in 2012. India's deep-space network will serve as the base station for future planetary exploration, such as a planned mission to Mars.

Europe's SMART-1 spacecraft, powered by a novel ion-propulsion system, has entered orbit. Japan, China, and the U.S. National Aeronautics and Space Administration (NASA) also hope to launch missions to the Moon over the next six years.

Telling newsmen that "the golden era of lunar exploration is about to begin," Narendra Bhandari, a senior scientist at the Physical Research Laboratory in Ahmedabad, India, said Chandrayaan-1 is intended to be only the first of a series of lunar missions from India. A long-term lunar exploration program with lander and sample return missions is currently under review by the Indian Space Research Organisation. The ISRO scientists are already addressing technical challenges ahead. Dr. R. Venkataramanan at the Vikram Sarabhai Space Centre (VSSC), for instance, has worked out via computer simulation a landing trajectory for a soft-landing mission to the Moon.

Cash From Afghan Opium Explosion Starves Pakistan's Poor

Dec. 19 (EIRNS)—As Pakistan, a Muslim nation with 160 million people, prepares to celebrate Eid ul-Adha, the second-most important Islamic holy day, much of the wheat flour has vanished from the markets. As a result, the price of the inadequate amount of wheat flour available has soared and is beyond the reach of the sea of poor who inhabit Pakistan. Wheat flour is the staple of majority of Pakistanis.

What is happening? Across Pakistan's western borders, particularly since the U.S. invasion of Afghanistan in the Winter of 2001, opium production has gone up by leaps and bounds. Opium cultivation has gone up at least fourfold. Subsequently, U.S.- and NATO-controlled Afghanistan is producing 95% of world's opium and is accounting for more than 50% of Afghanistan's GDP. So a large number of Afghans today have some cash—at least enough to buy food and other essentials at an inflated price. What that means is that Pakistan's wheat flour is now going across the undemarcated and open Pakistan-Afghanistan border, otherwise known as the Durand Line, depriving tens of millions of Pakistani poor. This flour is being paid for in cash generated by opium sales.

In other words, if the U.S. and NATO troops continue to protect Afghanistan's opium and marijuana cultivation, as they are doing now, Pakistan's poverty will be eliminated altogether by killing off its poor.

Eurasian Giants Hold First Trilateral Cooperation Meeting

Dec. 16 (EIRNS)—The first-ever Russia-China-India trilateral conference on "Strengthening Economic Cooperation" took place in New Delhi on Dec. 15. On the agenda was enhanced cooperation among the three giant Eurasian nations in developing energy, infrastructure, biotechnology, chemicals, pharmaceuticals, and nanotechnology. While the perspective is long-term—the next conference will be held in China in 2009—the need to upgrade cooperation was placed on the table. Trade, investment, and other cooperation, especially between Russia and India, is currently far below potential. Chinese-Russian trade is the highest, worth at least $40 billion this year, and China-India trade, which is growing very fast, is approaching $30 billion. India-Russia trade is worth a mere $4 billion, mostly in Russian military exports. This conference was proposed at the several trilateral meetings of the nations' foreign ministers, the latest in Harbin, China.

New South Korean President's Development Plans

Dec. 19 (EIRNS)—Lee Myung-bak, the candidate of the opposition conservative Grand National Party, swept the Presidential election in South Korea today, with just under 50% of the vote, against 26% for the government party's candidate and 15% for the leading right-wing candidate. Lee "MB," as he calls himself, although from the traditionally anti-communist party, reflects the changed character of Korea today, due both to the successful beginning of a North-South dialogue developed over the past decade through the the "Sunshine Policy" of opening up to the North, launched by President Kim Dae-jung in the 1990s, and to the recent success of the six-party talks, reflecting the defeat of the war party in the Bush Administration around Dick Cheney, in regard to Asia policy. China's and Russia's roles in both aspects of this shift has been crucial.

Lee, a former Hyundai executive, was mayor of Seoul, where his economic development of the city won him broad support. Lee promises "creative reconstruction" under his administration, with a blueprint for North Korea's economic development and peace on the Korean Peninsula, sustaining, if modifying the Sunshine Policy. His "MB-doctrine" for foreign policy comprises seven projects, encompassing North Korea, unification, security, and diplomacy, with enhanced infrastructure development in both parts of Korea. He proposes to bring the income of North Koreans to $3,000 per year within ten years.

China Cutting Grain Exports To Stop Inflation

Dec. 18 (EIRNS)—In a measure to try to control fast-rising food prices in China, the government has decided to end export-rebates on all important grains as of today, China Daily reported. The rebates were part of China's overall policy, developed during the last decades of the 20th Century, to expand exports, to earn as much foreign exchange as possible. The 13% tax rebate applied to exports of wheat, corn, and soybeans, and all flours.

In November, Chinese food prices shot up 18.2%, pushing overall inflation up to 6.9%, the highest in 11 years. Earlier in 2007, the government began selling state reserves of corn (maize) and wheat to ease price rises, and last week sold 500,000 tons of corn from its reserves. Another 500,000 tons will be sold today. On top of this, exports of corn and wheat were halted in the second half of 2007.

China, the world's largest grain consumer, is a net exporter of rice, wheat, and corn. It has exported over 85% more corn (4.9 million tons) so far in 2007 over 2006, while rice exports were up 7%, to 1.2 million tons. China's overall grain production is about 500 million tons this year.

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